COMMENT UPON VOLUNTARY NATURE OF SOCIAL SECURITY(Updated: April 18, 2003; links added Aug. 18, 2017)
Today, everyday Americans are constantly confronted with greater and more frequent requests from all too many sources that they provide to the inquiring parties their "Number of the Beast," the Social Security number ("SSN"). The examples of this modern day phenomenon are numerous and known to all. Many States are now moving to ostensibly require the display of SSNs upon drivers' licenses. Public school officials demand that school age children obtain SSNs before those children may be enrolled in any public school. Hospitals seek to obtain SSNs for each child born in their facilities. Private parties of all kinds, from banks to employers, deem it essential that they obtain the SSN of everyone with whom they may conduct any business. With all these entities making these demands, surely "the law" must contain a requirement that everyone have the "Number of the Beast". FN 1. Or, is it possible that everybody simply acts like lemmings, dutifully following the herd instinct without any question, assuming such requirement without any knowledge of it? More simply put, does "the law" demand that everybody apply for and obtain a SSN, or is such purported obligation nothing more than so much hot air?
The first inquiry regarding the legal duty to apply for and obtain a SSN must involve an examination of the U.S. Constitution and the powers granted therein to Congress. Congress can only possess powers which are contained, expressly or by necessary implication, within the text of the Constitution, particularly Art. 1, section 8. Being straightforward and to the point, the problem here for Social Security is that no particular clause in this or any other article of the Constitution is sufficient to sustain such power to compel a domestic American to participate in a compulsory retirement or benefits scheme. The power to thus mandate participation in Social Security must therefore be one which is based upon an implied power.
To determine if this power is one arising by implication, a study of various Supreme Court cases regarding the limits of Congressional power is essential. The States are arguably the governmental entities which might possess the inherent, municipal power to compel participation in a retirement or benefits scheme; but, if the states might have this power, an issue which appears to not have as yet been decided, does Congress have a corresponding power? Can Congress assume this inherent power of the State and claim it as its own?
Examples of Supreme Court cases which place some real limits upon the powers of Congress are manifold. In the License Tax Cases, 72 U.S. 462 (1866), the Supreme Court held that Congress could not authorize the conduct of business within the States in order to tax that business. In United States v. DeWitt, 76 U.S. 41 (1870), the Court held that a penal regulation in a tax act could not be enforced in a state. In United States v. Fox, 94 U.S. 315 (1877), the Court held that the United States could not receive property via a testamentary devise contrary to state law. In United States v. Fox, 95 U.S. 670 (1878), a penal statute remotely related to bankruptcy laws was held inapplicable in the States. In Patterson v. Kentucky, 97 U.S. 501 (1879), the Court held that U.S. patent laws conferred no superior rights within the States. In United States v. Steffens, 100 U.S. 82 (1879), federal trademark legislation unconnected with "interstate commerce" was held inapplicable inside the States. In Baldwin v. Franks, 120 U.S. 678, 7 S.Ct. 656 (1887), certain penal, federal civil rights legislation was held unenforceable "within a state." In Ex parte Burrus, 136 U.S. 586, 10 S.Ct. 850 (1890), and De La Rama v. De La Rama, 201 U.S. 303, 26 S.Ct. 485 (1906), the Court held that domestic relations matters were solely state concerns. In Reagan v. Mercantile Trust Co., 154 U.S. 413, 14 S.Ct. 1060 (1894), it was held that federally created corporations engaged in business in the States were subject to state laws. In Keller v. United States, 213 U.S. 138, 29 S.Ct. 470 (1909), it was held that Congress could not exercise police powers within the States. In Coyle v. Smith, 221 U.S. 559, 31 S.Ct. 688 (1911), it was held Congress could not dictate to a state, Oklahoma, where to locate its state capitol. In Hammer v. Dagenhart, 247 U.S. 251, 38 S.Ct. 529 (1918), and Bailey v. Drexel Furniture Co., 259 U.S. 20, 42 S.Ct. 449 (1922), the Court held that Congressional attempts to regulate and control manufacturing activities in the States were unconstitutional. See also Hill v. Wallace, 259 U.S. 44, 42 S.Ct. 453 (1922). In United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 42 S.Ct. 570 (1922), the Court held that Congress could not regulate coal mining in the States. In Linder v. United States, 268 U.S. 5, 45 S.Ct. 446 (1925), it was held that Congress could not regulate the practice of medicine in the States. In Industrial Ass'n. of San Francisco v. United States, 268 U.S. 64, 45 S.Ct. 403 (1925), the construction industry was deemed to be inherently of local concern and beyond Congressional powers. In Indian Motocycle Co. v. United States, 283 U.S. 570, 51 S.Ct. 601 (1931), the Court held that Congress could not impose a sales tax on items sold to state and local governments. Before the advent of Social Security, a statutorily mandated retirement system applicable to interstate carriers was held unconstitutional in Railroad Retirement Board v. Alton R. Co., 295 U.S. 330, 55 S.Ct. 758 (1935). The case of Hopkins Fed. S. & L. Ass'n. v. Cleary, 296 U.S. 315, 56 S.Ct. 235 (1935), stands for the proposition that Congress cannot "federalize" state financial institutions over objection from the State. The cases of A.L.A. Schecter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837 (1935), Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241 (1935), and Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855 (1936), emasculated most of the National Industrial Recovery Acts in part on the grounds of invasion of reserved powers of the States. In United States v. Butler, 297 U.S. 1, 56 S.Ct. 312 (1936), the Court held that Congress had no direct power to regulate agricultural production within the States. Finally, in Oregon v. Mitchell, 400 U.S. 112, 91 S.Ct. 260 (1970), it was held that Congress could not dictate voter qualifications to the States. The above decisions, as well as others, do place severe restraints upon the powers of Congress.
The federal social security act arises from events of the Great Depression. While that era saw extraordinary unemployment and a tremendous decline in national production, still it was not as cataclysmic as other events in our nation's history, such as the War Between the States. Further, no constitutional amendment was adopted during this era which can offer any basis for an expansion of Congressional powers. The legislation which started Social Security in 1934 must be viewed in the light of the various Supreme Court cases decided within a few decades of that legislation and prior thereto. When Congress adopted the Social Security Act in 1935, the Supreme Court had already addressed the first such act of 1934 and held in Railroad Retirement Board, supra, 295 U.S., at 368, that Congress had no authority to establish a retirement scheme through its most tremendous power, its control over interstate commerce:"The catalogue of means and actions which might be imposed upon an employer in any business, tending to the satisfaction and comfort of his employees, seems endless. Provision for free medical attendance and nursing, for clothing, for food, for housing, for the education of children, and a hundred other matters might with equal propriety be proposed as tending to relieve the employee of mental strain and worry. Can it fairly be said that the power of Congress to regulate interstate commerce extends to the prescription of any or all of these things? Is it not apparent that they are really and essentially related solely to the social welfare of the worker, and therefore remote from any regulation of commerce as such? We think the answer is plain. These matters obviously lie outside the orbit of congressional power."Additionally, the revolutionary acts of Congress adopted in the two preceding decades had been emasculated in a series of Supreme Court decisions. Are we to suppose that, against this legal background, Congress decided to enact legislation of the caliber which had been struck as unconstitutional in the same year?
In the second Social Security Act of 1935, Congress imposed excise taxes upon employers and those tax receipts were to be deposited with the Treasury. The act further provided schemes whereby participants could enjoy unemployment and retirement benefits. When the act was adopted, parties opposed thereto made challenges to the act, relying upon some, if not all, of the various cases cited above. The major arguments mounted against the act were premised upon contentions that the legislation constituted an invasion of state rights. In Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883 (1937), an employer challenged the unemployment tax imposed upon it and the Court held that such tax was an excise which Congress could impose. In reference to the contention that the subject matter of the act was properly within the historical field reserved to the states, the Court held that Congress could enact legislation to aid the states in an area of great concern. The Court placed considerable emphasis upon the fact that the states were reluctant to adopt unemployment acts because such taxes created differentials between states which had such legislation and those which did not. By creating a national unemployment act, this difference was eliminated and a great benefit to the American people resulted. The Court, therefore, found nothing constitutionally objectionable to the act as to the issues which were raised. In Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904 (1937), the same rationale was used to uphold the retirement features of the act. The importance of these two cases upholding the Social Security Act concerns the issues which these cases did not raise: neither of them addressed the issue of whether there was a requirement for any domestic American to join Social Security. The reason that this issue was not raised is because there is no such requirement, unless of course one works for a state government which has contracted into Social Security. See Public Agencies Opposed To Social Security Entrapment (POSSE) v. Heckler, 613 F.Supp. 558 (E.D. Cal. 1985), rev., 477 U.S. 41, 106 S.Ct. 2390 (1986).
The above review should readily demonstrate that there is indeed a real question concerning the point of whether one must submit an application to join Social Security. The cases which challenged the constitutionality of Social Security simply did not raise this issue, and it appears that no case has as yet dealt with it. FN 2. The reason for this absence of a challenge to such alleged requirement can only be explained by analyzing the act itself to determine if there is such a requirement. Because Congress lacks the constitutional authority to compel membership in Social Security, the act simply imposes no such requirement.
The modern version of the act is codified at 42 U.S.C. §§ 301-433. If there were a requirement that every American join the Social Security scheme, FN3, one would expect to find language in the act similar to the following: "Every American of the age of 18 years or older shall submit an application with the Social Security Administration and shall provide thereon the information required by regulations prescribed by the Secretary. Every member of Social Security shall pay the taxes imposed herein and records of such payments shall be kept by the Secretary for determining the amount of benefits to which such member is entitled hereunder." Amazingly, no such or similar language appears within the act, and particularly there is no section thereof which could remotely be considered as a mandate that domestic Americans join Social Security. The closest section of the act which might relate to this point is the requirement that one seeking benefits under the act must apply for the same. But, this relates to an entirely different point than a requirement that one join and secure a number.
Since the statutory scheme fails to impose such requirement, the next question to be asked is whether perhaps the Social Security regulations themselves might impose such duty. But here, the regulations are no broader than the act itself, and the duty to apply for and obtain a Social Security card or number boils down to the following found at 20 C.F.R. § 422.103:"(b) Applying for a number. (1) Form SS-5. An individual needing a social security number may apply for one by filing a signed Form SS-5, 'Application for a Social Security Card,' at any social security office and submitting the required evidence * * *.(NOTE: If you want to read a Social Security document which states that "Getting a Social Security number for your baby is strictly voluntary," click here. Also, please read the SSA letter to Scott McDonald which states that a citizen within the States is not required to get a SSN.)
"(2) Birth Registration Document. The Social Security Administration (SSA) may enter into an agreement with officials of a State * * * to establish, as part of the official birth registration process, a procedure to assist SSA in assigning social security numbers to newborn children. Where an agreement is in effect, a parent, as part of the official birth registration process, need not complete a Form SS-5 and may request that SSA assign a social security number to the newborn child.
"(c) How numbers are assigned.(1) Request on Form SS-5. If the applicant has completed a Form SS-5, the social security office * * * that receives the completed Form SS-5 will require the applicant to furnish documentary evidence* * *. After review of the documentary evidence, the completed Form SS-5 is forwarded * * * to SSA's central office * * *. If the electronic screening or other investigation does not disclose a previously assigned number, SSA's central office assigns a number and issues a social security number card * * *.
"(2) Request on birth registration document. Where a parent has requested a social security number for a newborn child as part of an official birth registration process described in paragraph (b)(2) of this section, the State vital statistics office will electronically transmit the request to SSA's central office * * *.Using this information, SSA will assign a number to the child and send the social security number card to the child at the mother's address."
The purported duty to apply for and obtain a Social Security number therefore boils down to this: you get it if you need it or request it. There is no legal compulsion to do so.
With the act of applying for and obtaining a SSN being entirely voluntary, the next question to be asked is whether any State can force you to use this number which is voluntary in the first place. This appears to have been addressed by § 7 of the Privacy Act of 1974, 88 Stat. 1896, which reads as follows:"Sec. 7. (a)(1) It shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number.See United States v. Two Hundred Thousand Dollars in U.S. Currency, 590 F.Supp. 866 (S.D. Fla. 1984).
(b) Any Federal, State, or local government agency which requests an individual to disclose his social security account number shall inform that individual whether that disclosure is mandatory or voluntary, by what statutory or other authority such number is solicited, and what uses will be made of it."
- "(2) the provisions of paragraph (1) of this subsection shall not apply with respect to–
- (A) any disclosure which is required by Federal statute, or
- (B) the disclosure of a social security number to any Federal, State or local agency maintaining a system of records in existence and operating before January 1, 1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.
(NOTE: Federal law now expressly allows the SSN to be used for a few other purposes; see 42 U.S.C. §405(c)(2)(C)(i):"It is the policy of the United States that any State (or political subdivision thereof) may, in the administration of any tax, general public assistance, driver's license, or motor vehicle registration law within its jurisdiction, utilize the social security account numbers issued by the Commissioner of Social Security for the purpose of establishing the identification of individuals affected by such law, and may require any individual who is or appears to be so affected to furnish to such State (or political subdivision thereof) or any agency thereof having administrative responsibility for the law involved, the social security account number (or numbers, if he has more than one such number) issued to him by the Commissioner of Social Security.")
Thus, it seems perfectly logical, if having a Social Security number is not mandatory but purely voluntary, no state can use the lack of a number in any adverse way against anyone. The state cannot make that which is voluntary under federal law something which is mandatory under state law.
Today, many school districts seek to force school age children to obtain Social Security numbers before such children may enroll in school. Further, many states deny drivers' licenses to those who refuse to provide SSNs. All of these acts are of recent vintage and therefore violate the prohibitions contained within the uncodified amendments to the Privacy Act noted above. Such requests are thus illegal.
What should be done by Americans who are opposed to use of the Social [In]security Number for whatever reason, be it the contention that it is the prelude to the "Beast's number" or any other? They should constantly inform those requesting the number that there is no obligation to have one.
Here is an article about the historical origins of the SSN.
Art. 1, § 9, cl. 7 of the U.S. Constitution provides that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." While this constitutional provision does not of itself place a maximum ceiling upon the amount of debt which can be created by Congress, it does require that appropriating legislation be enacted in order to incur debts. This is aptly demonstrated by the federal cases which have construed this part of the Constitution. In Cummings v. Hardee, 102 F.2d 622 (D.C.Cir. 1939), and Maryland Casualty Co. v. United States, 155 F.2d 823 (4th Cir. 1946), it was held that officers of the United States lacked all power to pay any claim against the United States in the absence of an appropriation from Congress to pay such claim. This principle was more fully explained in Hughes Aircraft Co. v. United States, 534 F.2d 889, 906 (Ct.Cl. 1976), where that Court declared:
SOCIAL SECURITY IS NOT A CONTRACT"The second principle is that before any expenditure of public funds can be made, there must be an act of Congress appropriating the funds and defining the purpose for such appropriation. Thus, no officer of the Federal Government is authorized to pay a debt due from the U.S., whether or not reduced to a judgment, unless an appropriation has been made for that purpose."See also Reeside v. Walker, 52 U.S. (11 How.) 272 (1850); Cincinnati Soap Co. v. United States, 301 U.S. 308, 57 S.Ct. 764 (1937); and Office of Personnel Management v. Richmond, 496 U.S. 414, 110 S.Ct. 2465, 2471 (1990). In National Association of Regional Councils v. Costle, 564 F.2d 583, 586 (D.C.Cir. 1977), that Court elucidated this principle by stating:"Government agencies may only enter into obligations to pay money if they have been granted such authority by Congress. Amounts so authorized by Congress are termed collectively 'budget authority' and can be subdivided into three conceptually distinct categories – appropriations, contract authority, and borrowing authority. Appropriations permit an agency to incur obligations and to make payments on obligations. Contract authority is legislative authorization for an agency to create obligations in advance of an appropriation. It requires a subsequent appropriation or some other source of funds before the obligation incurred may actually be liquidated by the outlay of monies. Borrowing authority permits an agency to spend debt receipts."Thus, it is quite apparent that in order for the federal government to incur debt, it must adopt legislation authorizing a specific amount of federal obligations to be incurred.
It is easy to demonstrate the operation of this provision of the Constitution and its application to government contracts. Suppose the feds desired to build a new courthouse at a cost of $200 million. An agency in charge of such a project could theoretically "contract" with a construction company to build this structure. However, until Congress actually appropriates money to pay for construction, there is no contract. Even if the contractor in this example incurred lots of costs preparing to build this courthouse which ultimately does not get built because of lack of funds, he has no claim against Uncle Sam for breach of contract. The same principle applies to every other government contractor, whether aerospace, military, et cet. Government contracts are unique and different from private sector contracts due to this constitutional limitation upon the power to contract.
Is Social Security a contract? A private insurance policy is clearly a contract because the policyholder makes a promise to pay money to the insurance company, which in turn agrees to likewise pay the policyholder if certain contingencies arise. These "promise to pay" elements are essential for a contract, but they simply are not present with Social Security. First, Social Security "payments" are not premium payments, but are taxes instead. Secondly, there is no corresponding and enforceable "promise to pay" from the Social Security Administration to its "beneficiaries." As noted above, government contracts are very special and require an appropriation from Congress before money can be expended and a contract made. Regarding Social Security, the only "beneficiaries" who have any claim against the public treasury are those for whom Congress has already made an appropriation, which can last no longer than a year. The rest of the Social Security claimants in America have no enforceable claim on public funds, and all they possess is a "political promise," upon which Congress can renege at any moment. If Congress decided tomorrow to cut off all Social Security, nobody would have any claim for payment. Thus, Social Security has never been and is not now a contract. See Flemming v. Nestor, 363 U.S. 603, 610, 80 S.Ct. 1367 (1960)("It is apparent that the noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments"); Richardson v. Belcher, 404 U.S. 78, 80, 92 S.Ct. 254, 257 (1971) ("The fact that social security benefits are financed in part by taxes on an employee's wages does not in itself limit the power of Congress to fix the levels of benefits under the Act or the conditions upon which they may be paid"); Califano v. Goldfarb, 430 U.S. 199, 210, 97 S.Ct. 1021, 1028 (1977) (Brennan J.) (plurality opinion) ("Congress has wide latitude to create classifications that allocate non-contractual benefits under a social welfare program"); and United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 174, 101 S.Ct. 453, 459 (1980) ("railroad benefits, like social security benefits, are not contractual and may be altered or even eliminated at any time").
In 1953, a subcommittee of the House Ways and Means Committee conducted hearings for the express purpose of settling the question of whether social security was contractual in nature; see Hearings of November 27, 1953 entitled "The Legal Status of OASI Benefits," (Part 6). The witness at the hearing was Dr. Arthur J. Altmeyer, who held several offices in the Roosevelt administration. He was a member of the first Social Security Board, and by 1946 became the Social Security Commissioner, retiring in 1953. During this hearing, various parties stated that social security was not a contract:At page 918:NOTE:
"Mr. Altmeyer: * * * There is no individual contract between the beneficiary and the Government.
"Mr. Dingell: Congress knew that, did it not?
"Mr. Altmeyer: Yes, of course. I am sure it did.
* * *
"Chairman Curtis: The individual * * * has no contract? Is that your position?
"Mr. Altmeyer: That is right.
"Chairman Curtis: And he has no insurance contract?
"Mr. Altmeyer: That is right."
At page 937:
"Chairman Curtis: We came to an agreement on one of our major premises, that this was no insurance contract, and the words did not come from me. They were volunteered by Mr. Altmeyer."
At page 968:
"Mr. Winn: * * * Mr. Altmeyer, there being no contractual obligation between the Government and the worker, it follows, does it not, that the benefit payments under title II of the Social Security Act are merely statutory benefits which Congress may withdraw or alter at any time?"
At page 969:
"Mr. Winn (reading): ‘These are gratuities, not based on contract * * *. Moreover, the act creates no contractual obligation with respect to the payment of benefits. This Court has pointed out the difference between insurance which creates vested rights, and pensions and other gratuities, involving no contractual obligations, in Lynch v. United States, (292 U.S. 571, 576-577)."
At page 994:
"Mr. Altmeyer: I have answered your question, sir. If you will refer to section 1101, you will find, as you read into the record, that there are no vested rights, that Congress may create different rights * * *."
At page 996:
"Mr. Winn: We have also established that there is no insurance contract between the Government and the worker within a covered wage whereby the rights and obligations of a party are set; that is correct, is it not?
"Mr. Altmeyer: No. You did not establish that. That has been self-evident since the law was passed in 1935."
At pages 1013-14 (the Chair's concluding remarks):
"Chairman Curtis: Mr. Altmeyer, it is apparent that the people of the country have no insurance contract. That does not mean that I do not want to do my full part to do justice to them and to carry out and make good on the moral commitment that has been made to them. Yet, notwithstanding the fact that they had no insurance contract, it remains true that the agency under your direction repeatedly in public statements, by pamphlets, radio addresses, and by other means, told the people of the country that they had insurance. I think a number of people were misled by that."
To whom are social security numbers assigned? The answer is found in 42 U.S.C. §405(c)(2)(B), which provides as follows:
(B)(i) In carrying out the Commissioner's duties under subparagraph (A) and subparagraph (F), the Commissioner of Social Security shall take affirmative measures to assure that social security account numbers will, to the maximum extent practicable, be assigned to all members of appropriate groups or categories of individuals by assigning such numbers (or ascertaining that such numbers have already been assigned):
(I) to aliens at the time of their lawful admission to the United States either for permanent residence or under other authority of law permitting them to engage in employment in the United States and to other aliens at such time as their status is so changed as to make it lawful for them to engage in such employment;
(II) to any individual who is an applicant for or recipient of benefits under any program financed in whole or in part from Federal funds including any child on whose behalf such benefits are claimed by another person; and
(III) to any other individual when it appears that he could have been but was not assigned an account number under the provisions of subclauses (I) or (II) but only after such investigation as is necessary to establish to the satisfaction of the Commissioner of Social Security, the identity of such individual, the fact that an account number has not already been assigned to such individual, and the fact that such individual is a citizen or a noncitizen who is not, because of his alien status, prohibited from engaging in employment; and, in carrying out such duties, the Commissioner of Social Security is authorized to take affirmative measures to assure the issuance of social security numbers:
(IV) to or on behalf of children who are below school age at the request of their parents or guardians; and
(V) to children of school age at the time of their first enrollment in school.
As easily seen, §405 simply does not mandate that a domestic American seek and obtain a SSN. Has a domestic American who has sought and obtained a SSN a felon for having violated 18 U.S.C. § 1001, which relates to submitting false documents to a government agency? Do people submit false information to federally insured banks when they give such banks SSNs, thus violating 18 U.S.C. §1344? Apparently, there needs to be formed an "Anti-Felony Committee" to stop these crimes.
- Of course, there are a few cases which recognize objections to the SSN on First Amendment, "freedom of religion" grounds. See Stevens v. Berger, 428 F.Supp. 896 (E.D.N.Y. 1977); Callahan v. Woods, 658 F.2d 679 (9th Cir. 1981); and Callahan v. Woods, 736 F.2d 1269 (9th Cir. 1984). See also Leahy v. District of Columbia, 833 F.2d 1046 (D.C.Cir. 1987), and Yeager v. Hackensack Water Co., 615 F.Supp. 1087 (D.N.J. 1985). See I Chron. 21:1-3; and Rev. 13:17, 14:9-10.
- Two challenges have been made concerning the requirement to provide SSNs to vote. See Meyer v. Putnam, 186 Col. 132, 526 P.2d 139 (1974), and Greidinger v. Davis, 988 F.2d 1344 (4th Cir. 1993).
- It does not appear that the Social Security Trust fund is administered by the Secretary of the Treasury. See 31 U.S.C. §1321.